Here's how the number of cannabis retailers compares to liquor stores in Saskatchewan

Almost four years into legalization, the number of cannabis retailers in Saskatchewan’s hub cities is almost on par with the number of liquor stores.

According to the Saskatchewan Liquor and Gaming Authority (SLGA) there are 155 cannabis retailers approved to operate across the province. That number does not include First Nations retailers, which no longer need SLGA permits.

SLGA statistics show 28 cannabis retailers in Regina, compared to 32 alcohol retailers.

Saskatoon has 38 licensed cannabis retailers compared to 37 liquor retailers. Moose Jaw has nine liquor stores and four cannabis stores.

Jason Childs, an associate professor of economics at the University of Regina, said there are some key differences when considering urban and rural markets.

“One of the big differences between rural and urban is demographic,” he said.

“Cannabis has historically been a younger person’s product, while alcohol tends to be associated with older people.”

Among the 18-29 year age range, Childs said people are currently drinking less alcohol than has been the case historically, and smoking much more.

“We’re seeing that difference play itself out a little bit with cannabis stores in urban centres rather than rural areas. The density is also going to drive it too,” Childs said, adding he doesn’t anticipate an immediate rush to fill the rural markets.

In a statement to CTV News, the SLGA said the alcohol retail system has a much longer and different history than the retailing of cannabis.

“Retail liquor stores are allocated based on population in a community,” the statement said. “The alcohol retailing system is the result of decades of various policies and regulations that were implemented for a variety of reasons.”

It’s still relatively early for the industry, and the Cannabis Council of Canada said it’s possible the urban-rural imbalance could even out over the coming years.

It suggests a collaborative approach to seeing liquor and cannabis stores balance out.

“In a sense, Saskatchewan has been forward looking,” Pierre Killeen, the vice president of legislative and regulatory affairs with the CCC said. “Maybe it’s time to look at a model where cannabis retail is co-located with liquor retail. It’s done in the province of Nova Scotia, so maybe there’s a lesson learned or a pilot project to be tried out.”

MARKET SATURATION

Farmer Jane Cannabis Co. makes up four of Regina’s 28 licensed cannabis stores. The first storefront opened in January 2020, with 12 now operating across Saskatchewan and Manitoba.

Kerri Michell, the president of Farmer Jane Cannabis Co., said getting started was relatively easy. Now, four years later, Michell said there is some concern regarding oversaturation in the Regina market.

“We’re set to almost double the number of recommended stores. There are nine more permits that are being looked at. I think it’s going to be rocky for a lot of people in the industry trying to make it through,” Michell said.

While oversaturation might be tough from a business perspective, Michell said there are still some positives.

“For one, it helps drive down prices so consumers are actually benefitting from this. What’s great about that is it allows people to have ease of access to cannabis which helps curb illicit sales,” she said.

Saskatchewan has an open market system, which means the province does not restrict the total number of cannabis retailers. However, it does issue permits.

Municipalities are in charge of approving retail stores. The City of Regina said it operates in the same way as the majority of others in Saskatchewan, focusing mainly on land-use requirements.

“We have no regulations that limit the ultimate number of cannabis retail stores within the city,” Ben Mario said.

“That could be possible through a licensing bylaw, but we don’t have such a regulation. I think if we did do that, the larger concern might be that it would run counter to the goals of legalization which is to ensure convenient access to product and compete with the illegal market.”

Childs said it’s normal to see an unsustainable amount of businesses open when a new industry is launched, but it evens out over time.

“Some of them are going to end up closing shop,” Childs said.

“This is what competition does. This is what it’s supposed to do. It’s supposed to weed out the less successful ones and that is what’s going to happen in cannabis if the market is in fact oversaturated.”

The SLGA said ultimately, it’s up to businesses to determine market potential.